Personal Capital and Vanguard Personal Advisor Services are two heavyweights in the wealth management space when it comes to planning and helping achieve your financial goals. While both of these popular names offer access to human advisors to guide your objectives, there are some important considerations you should take into account before selecting the best service for you.
Basic Overview of Personal Capital and Vanguard
About Personal Capital
Personal Capital is a digital wealth management firm offering full service from human advisors coupled with a free online financial dashboard. Built with technology in mind from their inception in 2009, Personal Capital has $19.4B in AUM and the award-winning dashboard is used by over 3m people with $1.2 trillion tracked as of May 31, 2021.
About Vanguard Personal Advisor Services
Best known for leveraging their size to reduce fees, Vanguard has been around since the 1970s and launched the Vanguard Personal Advisor Services (PAS) branch in 2015 to offer a blend of technology and human advice services mainly targeted towards existing Vanguard clients. A competitive fee structure with the name recognition of a popular financial institution makes it a compelling choice for financial planning.
Features of Personal Capital and Vanguard
Personal Capital vs. Vanguard: Account Types
Both Personal Capital and Vanguard Personal Advisor Services are fiduciaries that cater towards higher net-worth individuals best suited for users with significant money to deposit. The minimum investments of $50,000 for Vanguard and $100,000 for Personal Capital are considerable and the services, features, and fees of each should be justifiable before moving forward.
Vanguard offers comprehensive advice and direct portfolio management of brokerage and individual retirement accounts, and clients can plan for a variety of goals (retirement, college savings, and homeownership). Portfolio construction will vary depending on your goals and are well diversified, however accounts held at other firms won’t be managed directly by Vanguard advisors and it’s up to you to disclose them to your advisor.
Personal Capital offers personalized portfolios that are diversified across all investments and monitored daily. The proprietary Smart Weighting™ limits exposure to any one sector, size, or style in favor of greater diversification and balance. Because you can see your complete financial picture by linking all your accounts to the Personal Capital dashboard, dynamic portfolio allocation is based on your current, personalized situation.
At lower balances with Vanguard Personal Advisor Services, you can expect a mixed group of advisors via phone or video. At $500,000 you get access to one financial advisor for a fee, and at $1m+ the advisor access is free.
While $100,000 is the minimum to work with Personal Capital’s group of advisors as a client, at $200,000 investable assets you get two dedicated financial advisors and a specialist to help support you in real estate, stock options, and more. You can expect to receive regular investment reviews on your customized portfolio if you maintain $200,000 in investable assets.
Personal Capital also offers a Private Client Group status at $1m+, which includes the aforementioned two dedicated advisors and specialists, but also unlocks priority access to the Investment Committee and private equity investment options are available at $5m+. The professional grade financial Dashboard and tools, however, are free at all levels — whether you’re an investment client or not.
Kim, a Personal Capital client since 2013, describes the process in an unpaid testimonial: “Other firms were not as forthcoming and personal. I just felt like I had a human being in addition to all of the software and features.”
Personal Capital vs. Vanguard: Features and Accessibility
It’s easy to take advantage of Personal Capital’s offerings. You simply link your accounts to the free dashboard, work with an advisor to build a free personalized plan that’s yours to keep with no obligation, and then move forward with personalized wealth management advice, customized to your unique situation.
Upon registering for the free Personal Capital dashboard, you will be asked a few questions about your goals and prompted to link all your financial accounts to generate a holistic view of your complete financial health. Set-up takes about 10 minutes and you’ll be offered a chance to schedule your free call with an advisor to get your Personalized Plan or second opinion with no obligation if you meet the minimum investment. While the dashboard is free to use without scheduling a consultation, we recommend getting the most out of Personal Capital by speaking to a professional and having them craft a personalized recommendation for you.
The showcase of Personal Capital is the sophistication of the dashboard, which includes tools such as:
- Net Worth Tracker
- Savings Planner
- Retirement Planner
- Education Planner
- Investment Checkup
- Fee Analyzer
Using real data, you can get an accurate view of your net worth, see if your goals are on track with the Retirement Planner, or calculate whether you are losing money with the fee analyzer. Paid clients also have access to exclusive features like strategic tax-loss harvesting to offset realized capital gains and the proprietary Smart Withdrawal™ tool to optimize retirement income.
“The fact that Personal Capital does tax-loss harvesting quite frequently and reduces my tax load at the end of the year helps reduce my stress. That’s the kind of service that helps me be more comfortable with retirement.”
— Mike D., Personal Capital Client Since 2017, in an unpaid testimonial
When enrolling with Vanguard Personal Advisor Services, you will be prompted to provide financial information, goals, and risk tolerance. Whether you do this online or over the phone, you’ll then be prompted to speak with an advisor. Vanguard will then formulate a plan via algorithm within a few weeks and you’ll meet again to review and decide whether or not it’s a good fit for you.
Like Personal Capital, Vanguard allows you to explore various calculators and ‘what if’ scenarios to determine savings, simulations, and timeframes. A single account can include multiple goals and plan allocations; you can see how goals may compete with one another within long-term forecasts and recommendations.
Vanguard’s methodology is rooted in delivering the most value for their clients. Using a proprietary algorithm, the construct portfolio is primarily managed along the traditional Modern Portfolio Theory principles of diversification and minimal risk. You can opt-in through a cost basis process for tax-loss harvesting at the time of enrollment.
Personal Capital vs. Vanguard: Customer Service
Within the Personal Capital dashboard, you can directly contact your advisor or support team via chat support, and the Personal Capital website also offers a ticket submission system and support phone number as a resource for customer support.
Vanguard Personal Advisor Services clients can reach dedicated customer support via a separate phone line. While there’s no live chat, registered clients can send an email through a secure messaging feature. You can also schedule an appointment to talk with an advisor at any time through the interface.
Personal Capital vs. Vanguard: Security
As fiduciaries, Personal Capital works to help you achieve your financial goals. To protect your personal information, the company will never sell your data with advertisers.
The company employs multiple layers of security. A pioneer in the digital security space, Personal Capital has an active partnership with Yodlee to further safeguard user data. Multi-factor authentication and AES-256 data encryption protects account information to keep it both safe and private.
Personal Capital uses a state-of-the-art security strategy built on modern infrastructure. Your data is encrypted in transit with TLS encryption (rated A by Qualys SSL Labs) and at rest using the latest AES-256 standard. All logins utilize multi-factor authentication, considered by security experts as one of the best ways to secure your account.
Using Personal Capital’s holistic Dashboard can also help you identify any fraudulent activity in any one of your multiple financial accounts.
Investors who use Vanguard services have the opportunity to opt-out from the firm collecting and sharing your information to advertising providers.
Vanguard employs various security features including 256-bit SSL encryption, account activity alerts, and time-out account features to help secure information.
Clients can choose to adopt security codes or keys, activity alerts, or voice verification. Vanguard provides an online security tip center on their website with advice on how to prevent and report fraud.
Pricing and Fee Comparison
When it comes to cost, Vanguard Personal Advisor Services emphasizes their low fees of 0.30% advisory fee on AUM up to $5M each quarter.
Personal Capital charges one all-inclusive annual management fee at a fraction of the cost of traditional financial institutions. There are no hidden fees, no trailing fees and no trade commissions. The tiered rates regress based on assets under management and start at .89% for portfolios up to $1M.
|For Investment Services & Wealth Management Clients|
|For Private Clients|
More than just a robo-advisor, Personal Capital’s fee structure is inline with traditional top tier wealth management firms. Access to the net worth, savings, budgeting and cash flow, retirement, and investing tools are completely free. You only pay if you sign up for the company’s wealth management services.
Deciding Which is the Best Choice for You
When seeking a blend of human advice and technology, both Personal Capital and Vanguard Personal Advisor Services are world class choices. If the human element is not as important to your planning and advisory team, then Vanguard’s offering makes a lot of sense for higher net worth individuals looking for a budget conscious approach.
If you prefer to prioritize accessible human service and an experience in direct competition to traditional financial advisors, Personal Capital provides a complete team of licensed fiduciary advisors dedicated to your personalized goals, and at a lower cost than legacy providers.
“I have somebody on my side who listens, responds, and really cares,” said Marla S., a Personal Capital client since 2020, in an unpaid testimonial. “She does her homework. When we get together, we usually have a 30- to 45-minute conversation, but she’s already thought deeply about what we’re going to talk about. She understands the idiosyncrasies of my financial life.”
Client testimonials are unpaid and representative of the client’s views at the time it was collected. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Analysis is conducted at the time of publication and may change over time, please see each company’s website for updated information.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.